FLAT PAYMENT rates and increased operating costs caused by the nation’s economic crisis are hindering physician practices, experts say, with smaller practices facing the most problems.
“The industry is just starting to spiral,” said William Jessee, MD, president and CEO of the Medical Group Management Association. “Practices will start asking ’What expenses can I cut?’”
Robert Eidus, owner of and sole physician for Cranford Family Practice in Cranford, N.J., said he hasn’t seen any effects yet, but “there is a lag between the financial crisis and the downturn in healthcare.”
Eidus said he may have to adjust his fees or patients may not come in. He also expects the number of uninsured visitors to increase.
“It will be difficult for practices sending in bills and not knowing for 30, 60 or 90 days whether they’re covered,” he said. “It turns us into a collections agency.”
Donald Fisher, president and chief executive officer of the American Medical Group Association, said his members have reported that they’ve seen a decrease in the number of elective procedures. Patients may be trying to conserve resources, and may be less inclined to take a few weeks off from work and risk losing their job.
“Once we get deep into (a recession), people won’t have insurance and won’t seek services,” Fisher said.
While Medicare patients are likely to take a hit, physician practices will also feel the pinch. A survey conducted by the MGMA suggests that physicians may reduce or eliminate health insurance for employees and may be willing to cut back on staffing and staff compensation in order to stay afloat.